Vicky Kumar Rana vs Kamal Kumar Nangia & Ors.
2010 Latest Caselaw 1817 Del

*             THE HIGH COURT OF DELHI AT NEW DELHI

+                IA No. 4003/2010 in CS(OS) No.572/2010

                                          Date of Decision : 07.04.2010

Vicky Kumar Rana                                    ......Plaintiff
                               Through:      Mr. A. S. Chandhiok, Sr.
                                             Adv. with Mr. P. Sharma,
                                             Advocate

                                 Versus

Kamal Kumar Nangia & Ors.               ...... Defendants
                               Through:  Mr.M.Sharma, Advocate for
                                         defendant no.3.

CORAM :
HON'BLE MR. JUSTICE V.K. SHALI

1.     Whether Reporters of local papers may be
       allowed to see the judgment?                     YES
2.     To be referred to the Reporter or not ?          YES
3.     Whether the judgment should be reported
       in the Digest ?                                  YES

V.K. SHALI, J. (Oral)

IA No. 4003/2010

1. On 26.03.2010 the present suit came for consideration and

notice was directed to be issued to the defendants for

06.04.2010. So far as the IA No. 4003/2010 is concerned, it

was an application under Order XXXIX Rules 1 and 2 read with

section 151 CPC filed by the plaintiff for an ex-parte ad interim

stay against dispossession from the third floor of the suit

property bearing no. 484, Katra Ashrafi, Chandni Chowk, Delhi

during the pendency of the suit.

2. After hearing the learned senior counsel for the plaintiff, an ex-

parte ad interim injunction was issued against the defendants

restraining them from dispossessing the plaintiff who is allegedly

in occupation of the shop at third floor of the property bearing

no. 484, Katra Ashrafi, Chandni Chowk, Delhi till the next date

of hearing. It was also directed that the defendant no. 3 shall

not obstruct ingress and egress from any passage going on to

the third floor of the suit property.

3. The matter was listed yesterday before the Court and arguments

were heard on the continuation of the said stay order. The

learned counsel for the defendant no. 3, namely, the Bank of

India with whom the suit property was mortgaged by way of the

security raised objection to the continuance of the ex-parte ad

interim order against the defendants on the ground that the

plaintiff has concealed relevant information from the Court on

account of which the aforesaid ex-parte ad interim order came to

be passed. Accordingly, at his request, I have heard the learned

senior counsel for the plaintiff Mr. A.S. Chandhiok and the

counsel for the defendant no. 3 on the continuance of the stay

order and the matter is adjourned for today for orders. Before

dealing with the rival contentions with regard to continuance or

the vacation of the ad interim order passed on 26.03.2010, it

would be worthwhile to give brief facts of the case.

4. The plaintiff has filed the present suit for permanent injunction

against three defendants, namely, Shri Kamal Kumar Nangia,

Shri Samarth Kumar Nangia and Bank of India. It was alleged

in the plaint that he entered into an oral rent agreement with

the erstwhile owner of the suit property Shri Mukesh Kapoor

Kailashwati in respect of the third floor of the property bearing

no. 484, Katra Ashrafi, Chandni Chowk, Delhi and took

possession of the same. It is alleged that the plaintiff started

business of garments under the name and style of „Chhabra

Textile Corporation‟. The plaintiff contends that he has been

doing his business under the said name and style since 2000

and has been making regular payment of sales tax. A

photocopy of the assessment order is also placed on record. It

is alleged that the plaintiff has invested considerable amount of

money in making the premises presentable for running the

garment business and is presently running a ladies garments

business under the name and style of „Vicky Creation‟. It is

alleged that the defendant nos. 1 and 2 purchased the suit

property from the erstwhile owners on 19.02.2008 and they were

also doing the business of garments in the same building and

they were jealous of the business being run by the plaintiff and

accordingly tried to create hurdles in the use of the premises

under the occupation of the plaintiff by stopping his access from

the ground floor on to the third floor. It is alleged that the

defendant nos. 1 and 2 in order to dispossess the plaintiff in a

deceitful manner and in connivance with defendant no. 3 visited

the suit premises on 23.03.2010 and threatened the plaintiff to

vacate the premises on or before 29.03.2010 failing which they

would be compelled to take forcible possession of the suit

premises. The plaintiff on inquiry also learnt that the defendant

no. 3 had inserted notices in the newspaper on 25.12.2009 for

taking the possession of the suit premises without mentioning

his name and hence the present suit was filed by the plaintiff

against all the three defendants for permanent injunction

restraining them including their employees, representatives,

agents etc. from creating any obstruction in the common

passage or for dispossessing the plaintiff from the suit premises.

5. On notice being issued the defendants put in appearance

through their counsel. The defendant nos. 1 and 2 had sought

time to file the written statement while as the defendant no. 3

contested an ex-parte ad interim injunction on the ground of

lack of jurisdiction of this Court to entertain the suit itself. In

any case, it was contended by them that the question of

jurisdiction even if it is deferred by this Court to be considered

only after receipt of the reply the ex-parte ad interim injunction

which has been passed in favour of the plaintiff deserves to be

vacated/modified keeping in view Section 34 of the

Securitisation and Reconstruction of Financial Assets and

Enforcement of Security Interest Act, 2002 (hereinafter as the

„Act‟).

6. It was contended that in the instant case, the defendant nos. 1

and 2 were the borrowers of huge amount of money for their

business purposes and they had furnished the entire suit

property owned by them namely property bearing no. 484, Katra

Ashrafi, Chandni Chowk, Delhi by way of security as a

mortgage to the defendant no. 3/bank. The defendant no. 3 in

terms of the Act, recalled the entire loan amount and asked the

defendant no. 2 to repay the entire amount within a period of 60

days in terms of Section 13 of the said Act, and thereafter,

issued a public notice in terms of Section 13(4) of the Act. It is

also stated that it took the symbolic possession of the suit

property and only the physical possession was to be taken in the

instant case to realize the huge amount on arrears of loan and

the interest, which is to the tune of approximately nine crores.

It was contended that the plaintiff with a view to defeat the very

purpose of the provisions of the Act has chosen this ingenious

method of obtaining a restraint order against the defendant no.

3 by colluding with the defendant nos. 1 and 2 in as much as

the documents of rent deed were made to create the false

tenancy agreement only in the month of 09.12.2009 to show

that the plaintiff was in occupation of the suit premises in the

capacity of a tenant who is protected under the Rent Act and the

rent was purposely shown as less than Rs.3,500/- so that he

gets the protection of the Delhi Rent Control Act.

7. It was also contended by the learned counsel for the defendant

no. 3 that apart from Section 17(1) of the Act which enables any

aggrieved person which will include the present plaintiff also

from any action initiated by the bank in pursuance to realization

of its loan amount initiated under Section 13 of the Act to file an

appeal before a specialized tribunal which has been created

specifically for this purpose. It was also stated that Section 34

of the Act specifically bars the jurisdiction of the Civil Court to

entertain such a suit as has been filed by the plaintiff. The

learned counsel for the defendant no. 3 has referred to a number

of judgments including the judgment of the Apex Court in

Mardia Chemicals Ltd. Etc. Etc. Vs. Union of India (UOI) and

Ors. Etc. Etc. AIR 2004 SC 2371, Branch Manager, State

Bank of India, Commercial Branch & Anr. Vs. Chinjgepalli

Lathangi & Ors. 2006(1) ALD 798, Trade Well Vs. Indian Bank

2007 Crl. LJ 2544 and Sajay Bansal Vs. Sh. Rakesh K.

Ahlawat & Ors. W.P. (C) 20229/2004.

8. So far as the plaintiff is concerned, the learned senior counsel

Mr. A. S. Chandhiok contended that by virtue of Section 34 of

the Act the complete jurisdiction of the Civil Court is not barred

to adjudicate a dispute between a party and the bank which is of

a civil nature and which does not fall within the purview of the

Act. The learned senior counsel drew the attention of this

Court to certain observations passed by the Apex Court in

Mardia Chemical (Supra) at paras 51 and 52 wherein it has

been observed as under:-

"51. However, to a very limited extent jurisdiction of the civil court can also be invoked, where for example, the action of the secured creditor is alleged to be fraudulent or their claim may be so absurd and untenable which may not require any probe, whatsoever or to say precisely to the extent the scope is permissible to bring an action in the civil court in the cases of English mortgages. We find such a scope having been recognized in the two decisions of the Madras High Court which have been relied upon heavily by the learned Attorney General as well appearing for the Union of India, namely V.Narasimhachariar (supra) p.135 at p. 141 and 144, a judgment of the learned single Judge where it is observed as follows in para 22:

"The remedies of a mortgagor against the mortgagee who is acting in violation of the rights, duties and obligations are twofold in character. The mortgagor can come to the Court with an injunction for staying the sale if there are materials to show that the power of sale is being exercised in a fraudulent or improper manner contrary to the terms of the mortgage. But the pleadings in an action for restraining a sale by mortgages must clearly disclose a fraud or irregularity on the basis of which relief is sought: „Adams v. Scott, (1859) 7 WR (Eng.) 213 (Z49). I need not point out that this restraint on the exercise of the power of sale will be exercised by Courts only under the limited circumstances mentioned above because otherwise to grant such an injunction would be to cancel one of the clauses of the deed to which both the parties had agreed and annul one of the chief securities on which persons advancing moneys on mortgages rely. (See Rashbehary Ghosh Law of Mortgages, Vol. II, Fourth Edn., page 784).

52. The other decision on which reliance has been placed is A.Batcha Saheb Vs. Nariman K.Irani & Anr., AIR 1955 Madras DB p.491 more particularly on paragraph 8."

9. It was also contended by the learned senior counsel that he

may not be dispossessed from the suit premises except in

accordance with due process of law because he is a bonafide and

genuine tenant protected under the Rent Act, and therefore, the

process of law should be resorted to in order to buttress his

contention that he was a bona fide tenant, the learned senior

counsel drew the attention of the Court to the photocopy of the

document to indicate that he has paid the license fee to the

Municipal Corporation of Delhi for running his business.

10. The learned senior counsel for the plaintiff has also relied upon

the judgment of the learned Single Judge of Calcutta High court

in support of his contention that the Civil Court‟s jurisdiction is

not completely ousted.

11. I have considered the respective submission made by the

learned senior counsel for the plaintiff and the learned counsel

for the defendant no. 3. I have gone through the record.

12. It may be pertinent to mention here that the provisions of the

Act have been sufficiently dealt with and interpreted by not only

the Apex Court but also by various High Courts including our

own High Court and the extensive examination including the

dissection of the various provisions especially Section 13, 17 and

34 of the Act makes the picture very clear. These provisions

are not being specifically reproduced herein, however, the sum

and substance of the section /provisions, the parameters which

emerge from these sections is that in cases where the property is

mortgaged or is furnished as a security to a financial

institutions or a bank by a person as a security for the loan

which has been taken by him in the event of his default in

payment of requisite installment of the loan or if he does not pay

at all or if his account becomes non-performing asset,

bank/financial institutions need not seek orders for attachment

before judgment as is done in the civil law under Order XXXVIII

Rule 5 of the CPC. On the contrary, the bank can issue to such

defaulter, a notice recalling such a facility and ask defaulter

borrower to clear the entire outstanding within a period of 60

days from the date of issuance of such a notice and in case the

defaulter does not comply with the said notice then try to take

the physical possession of the property mortgaged or furnished

as a security by following various steps which are envisaged

under Section 13(4) of the Act by giving a public notice and

thereafter go to the Court of CMM under Section 14 of the Act

and take actual possession of the said property as a secured

creditor. In this scheme of things, it has been visualized by the

legislature that there may be persons other than the borrowers

who may have interest in the property who may have some

objections regarding the realization of the loan amount from the

secured assets and for such a person Section 17 (1) of the Act

makes it abundantly clear that any person which will include a

„borrower‟ as well as non-borrower also if he feels aggrieved from

any action of the bank he can approach the Debt Recovery

Tribunal which is a specialized forum created under the Act

itself to seek redressal of his grievance. Further in order to

make this scheme of the Act operative both functional as well as

effective the jurisdiction of the Civil Court has been specifically

barred under Section 34 of the Act. A conjoint reading of the

13, 17 and 34 of the Act would clearly show that even though

the plaintiff who may be claiming himself to be the tenant in

respect of the third floor of the suit property which was pledged

with the defendant no. 3 as a secured asset had to approach the

Debt Recovery Tribunal in case he felt aggrieved from the action

of the defendant no. 3 in issuing the public notice on

25.12.2009 or by threatening to take possession of the suit

property of the premises on 22.03.2010 when the officials of the

bank along with the defendant nos. 1 and 2 are alleged to have

visited and threatened the plaintiff from being dispossessed.

Further Section 34 of the Act ousted the jurisdiction of the Civil

Court thereby meaning that this Court is prohibited from taking

cognizance of the suit filed by the plaintiff himself. This

scheme of thing has been clearly approved by the Apex Court in

para 50 and 59 of Mardia Chemicals (Supra). It will be

worthwhile reproducing herein below the relevant observations

of the apex court:

51. "It has also been submitted that an appeal is entertianble before the Debt Recovery Tribunal only after such measures as provided in sub-section (4) of Section 13 are taken and Section 34 bars to entertain any proceeding in respect of a matter which the debt recovery Tribunal or the appellate Tribunal is empowered to determine. Thus before any action or measure is taken under sub-section (4) of Section 13, it is submitted by Mr. Salve one of the counsel for respondents that there would be no bar to approach the civil court. Therefore, it cannot be said no remedy is available to the borrowers. We, however, find that this contention as advanced

by Shri Salve is not correct. A full reading of Section 34 shows that the jurisdiction of the civil court is barred in respect of matters which a Debt Recovery Tribunal or appellate Tribunal is empowered to determine in respect of any action taken "or to be taken in pursuance of any power conferred under this Act". That is to say the prohibition covers even matters which can be taken cognizance of by the Debt Recovery Tribunal though no measure in that direction has so far been taken under sub-section (4) of Section 13. It is further to be noted that the bar of jurisdiction is in respect of a proceeding which matter may be taken to be Tribunal. Therefore, any matter in respect of which an action may be taken even later on, the civil court shall have no jurisdiction to entertain any proceeding thereof. The bar of civil court thus applies to all such matters which may be taken cognizance of by the Debt Recovery Tribunal, apart from those matters in which measures have already been taken under sub- section (4) of Section 13."

59. "We may like to observe that proceedings under Section 17 of the Act, in fact are not appellate proceedings. It seems to be a misnomer. In fact it is the initial action which is brought before a Forum as prescribed under the Act, raising grievance against the action or measures taken by one of the parties to the contract. It is the stage of initial proceeding like filing a suit in civil court. As a matter of fact proceedings under Section 17 of the Act are in lieu of a civil suit which remedy is ordinarily available but for the bar under Section 34 of the Act in the present case. We may refer to a decision of this court reported in MANU/SC0020/1974 : (1974) 3 SCR 882 Smt. Ganga Bai Vs. Vijay Kumar & Ors. where in respect of original and appellate proceedings a distinction has been drawn as follows:

".......There is a basic distinction between the right of suit and the right of appeal. There is an inherent right in very person to bring a suit of civil nature and unless one's choice. It is no answer to a suit, howsoever frivolous to claim, that the law confers no such right to sue. A suit for its maintainability requires no authority of law and it is enough that no statute bars the suit. But the position in regard to appeals is quite the opposite. The right of appeal inheres in no one and therefore an appeal for its maintainability must have the clear authority of law. That explains why the right of appeal is described as a creature of stature."

13. It has been expressed by the Apex Court that the bar of Civil

Court applies to all such matters which may be taken

cognizance of by the Debt Recovery Tribunal apart from those

matters in which measures have already been taken under

Section 13(4) of the Act which has been applied not only by

other High Courts but also our own High court in the above-

mentioned judgments.

14. As against this the learned senior counsel for the plaintiff has

relied upon a solitary authority of the learned Single Judge of

the Calcutta High Court in Manager, UCO Bank vs. Samar

Sarkar and others [AIR 2008 Cal 19] to contend that there

may be areas where the Civil Court will have the jurisdiction. I

have gone through the said judgments. Prima facie in the light

of the fact that there is an authority from the Apex Court in

Mardia Chemicals (Supra) which gives a complete scheme of

things in which even if a person is not a borrower his grievance

can be redressed I do not feel persuaded to accept the judgment

of the learned Single Judge of Calcutta High court so as to give a

relief to the plaintiff. Even on merits, the judgment of the

Calcutta High Court is totally distinguishable from the facts of

the present case. This is on account of the fact that in the

present case the plaintiff is claiming to be a defaulter tenant in

respect of the third floor of the suit property. The definite case

of the plaintiff is that he has been in occupation of the suit

premises since the year 2000 under an oral tenancy from the

erstwhile owners. The erstwhile owners admittedly have sold

the property to the defendant nos. 1 and 2 on 19.02.2008. It is

mentioned in the last but one page of the said sale deed that the

erstwhile owner have obtained the physical „vacant‟ possession

of the entire suit property bearing no. 484, Katra Ashrafi,

Chandni Chowk, Delhi which would obviously include the

second/third floor of the suit property. If the erstwhile owners

are showing that they had obtained the possession of the entire

building and if they had obtained the vacant possession of the

entire building then this fact is totally inconsistent to the

contention of the plaintiff that he was in occupation of the

second and the third floor of the suit property as on 19.02.2008.

Therefore, this prima facie clearly shows that the documents of

tenancy purported to have executed on 09.12.2009 by the

defendant nos. 1 and 2 in favour of the plaintiff for a sum of

Rs.1,600/- as rentals per month in respect of the second and

the third floor was created subsequently and does not record the

factum that the plaintiff was in possession of the suit property

consistently from the year 2000. The documents like sales tax

receipt or the documents purported to be issued by the

Municipal Corporation of Delhi are not such a document which

would inspire any confidence in the light of the fact that there is

an inherent contradiction in the stand of the plaintiff with the

documents which are placed on record. Further, the type of

documents which are being used and relied upon by the plaintiff

in order to contend that he was in occupation of the part of the

suit property since 2000 are the type of documents which can

easily be procured by a party from the authorities which are

purported to have been issued by them.

15. The learned counsel for the defendant no. 2/Bank has also

during the course of the dictation of the judgment in Court given

a photocopy of the affidavit to have been given by the defendant

nos. 1 and 2 to the defendant no. 3/bank which is sworn before

a notary public sometime in February, 2008 wherein it has been

clearly stated that the suit property is not rented or leased out to

anybody. This also goes contrary to the stand of the plaintiff

that he was in occupation of the suit property even prior to the

execution of the purported lease by the defendant nos. 1 and 2

in favour of the plaintiff on 09.12.2009.

16. In the light of the aforesaid, I feel that the plaintiff does not have

any prima facie case and the balance of convenience is also not

in favour of the plaintiff. The plaintiff will not suffer an

irreparable loss in case an ex-parte ad interim injunction order

is not extended during the pendency of the suit asking the

defendants to file the reply. The plaintiff is free to approach the

Debt Recovery Tribunal under Section 17 of the Act in case he

still feels aggrieved and accordingly the said order passed on

26.03.2010 restraining the defendant no. 3 from dispossessing

the plaintiff or stopping his ingress and egress to the

second/third floor of the suit property is vacated and not

extended. Let the written statement and the reply to the

application be filed within 30 days with an advance copy to the

plaintiff who may respond thereto within two weeks, thereafter.

CS(OS) No. 572/2010

List on 24.05.2010.

V.K. SHALI, J.

April 07, 2010 KP